Equity theory

Acronym

N/A

Alternate name(s)

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Main dependent construct(s)/factor(s)

An Individual’s distress

Main independent construct(s)/factor(s)

An individual’s perception of their input into a relationship. An individual’s perception of their output from a relationship. An individual’s perception of the input of the other participant in the relationship. An individual’s perception of the output of the other participant in the relationship.

Concise description of theory

Equity Theory focuses upon a person’s perceptions of fairness with respect to a relationship. During a social exchange, an individual assesses the ratio of what is output from the relationship to what is input in the relationship, and also the ratio of what the other person in the relationship outputs from the relationship to what is input into the relationship.

Equity Theory posits that if the person perceives that there is inequality, where either their output/input ratio is less than or greater than what they perceive as the output/input ratio of the other person in the relationship, then the person is likely to be distressed.

For example, consider two situations in which change is presented to two employees. If an employee was given a salary increase and a peer was seen as being given a larger increase in salary for the same amount of work, the first employee would evaluate this change, perceive an inequality, and be distressed. However, if the situation was such that the first employee perceived the other employee being given a larger increase in salary as well as being given more responsibility and therefore relatively more work, then the first employee may evaluate the change, conclude that there was no loss in equality status, and not resist the change.